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EU readies heavy tariff on China solar panels

11 May 2013

BRUSSELS: The EuropeanCommission proposedyesterday what an EU source

said was an urgently neededanti- dumping levy on importsof Chinese solar panels,allegedly unfairly subsidisedby a government that hasretaliated in kind to similarmoves.The Commission, the EUsexecutive arm, is now

canvassing member states to see if they agree with a provisional heavytariff of 47 percent, the source said.The consultation process has been launched, the source said, adding thatthe Commission wanted to announce a decision on June 5 to helpstruggling European manufacturers.The proposal is an urgent reaction to an urgent situation, the sourceadded.European solar panel makers complain that they are being undercut bycheap Chinese imports, jeopardising their future as Beijing seeks to cornerthe market in a key green technology.The EU ProSun industry association says China now holds about 80 percentof the EU market as European companies fall by the wayside in the face ofits subsidised imports.If the situation continues and the European producers are not allowed tocompete with the Chinese producers at fair prices, the whole industrymight cease to exist, it claims on its website.In a series of tit-for-tat trade disputes with China , the Commissionlaunched an anti-dumping probe into imports of Chinese solar panels inSeptember.It then opened an anti-subsidy probe in November as China in turn decidedto launch a similar investigation into European exports of polysilicon, a keycomponent for solar panel makers.Brussels upped the ante in February with an anti-dumping probe intoimports of solar glass made in China and in March said it would beginrecording all imports of Chinese solar panels and components as part of its

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investigations.The conclusion of these probes is not due until next year but the EU sourcesaid the situation was becoming so serious that the Commission believed ithad to take action sooner.There is a real risk that some European companies could disappear beforethe (final) decision is taken and it is for that reason that the Commission

proposed a provisional tariff, the source said.While some of the EUs 27 member states are critical of Beijing s tradepolicy, others are reluctant to get involved in another spat with China .It is difficult to negotiate with the Chinese, said one EU official who askednot to be named.They find it difficult to respect the laws of their partners and with them,everything becomes a political issue.As China has shown several times, it is ready to play hardball when it feelsits interests are being disregarded.

In response to EU plans to impose a carbon emissions levy on all airlinesflying into the bloc, China threatened to cut its massive orders for Airbusaircraft, pressing France and Germany in particular to get it changed.For the moment, the EU has suspended the plan for a year.Meanwhile, the French and German environment ministers said they hopedfor a political solution to the dispute, with the solar energy sector sufferingbadly from over-capacity and under pressure from all sides.We have to separate the investigation which will end one way or the other... and the second objective which is that we clearly are looking for apolitical solution with China , Germany s Peter Altmaier said in Berlin .There is a crisis of global over-capacity ... which is affecting China too ...the question for us all is how to overcome the crisis, said his visitingFrench counterpart Delpine Batho.The EU source said that while Chinese pressure complicated matters, theCommission expected to get approval for the provisional tariff because itwas based on the facts ... it has a legal basis and is not political.At the same time, China too might have an interest in this instance in notreacting too strongly, the EU source said, noting that the tariff is so farprovisional only and not fixed.Brussels says ties with China are among the most important but because itdoes not view the communist country as a fully- fledged open market, itremains cautious about the governments role in the economy.

Source: AFP